UC-NRLF 


1915 
DOCS 


B   M   5bS 


UCB 


DEPARTMENT  OF  THE  INTERIOR 


L 


REGULATIONS 

TO  GOVERN 

OIL  AND  GAS  OPERATIONS      ^°  f 

ON 

RESTRICTED  INDIAN  LANDS  IN  OKLAHOMA 


APPROVED  OCTOBER  20,  1915 


WASHINGTON 

GOVERNMENT  PRINTING  OF! ICE 
1915 


D 


o< 


REGULATIONS  TO  GOVERN  OIL  AND  GAS  OPERATIONS  ON  RESTRICTED 
INDIAN  LANDS  IN  OKLAHOMA, 


DEFINITIONS. 

The  following  expressions,  wherever  used  in  the  lease  and  regula- 
tions, shall  have  the  meaning  now  designated,  viz : 

Superintendent. — The  superintendent  of  any  Indian  agency  in 
Oklahoma,  or  any  other  person  who  may  be  in  charge  of  such  agency 
and  reservation,  and  it  shall  be  his  duty  to  enforce  compliance  with 
these  regulations. 

Inspector. — Any  person  appointed  as  inspector  of  oil  and  gas  oper- 
ations, or  who  may  be  designated  by  the  Secretary  of  the  Interior  or 
the  Commissioner  of  Indian  Affairs  to  supervise  oil  or  gas  operations 
on  restricted  Indian  lands,  acting  under  general  instructions  from 
the  Bureau  of  Mines  and  under  the  supervision  of  the  superintendent. 

Oil  lessee. — Any  person,  firm,  or  corporation  to  whom  an  oil-mining 
lease  is  made  under  these  regulations. 

Gas  lessee. — Any  person,  firm,  or  corporation  to  whom  a  gas  lease 
is  made  under  these  regulations. 

Leased  lands. — The  term  "  leased  lands  "  or  "  leased  premises  "  or 
"  leased  tract "  shall  mean  any  restricted  lands  belonging  to  Indian 
allottees  within  the  State  of  Oklahoma  from  which  restrictions  have 
not  been  removed,  and  which  have  been  leased  by  such  allottees  with 
the  approval  of  the  Secretary  of  the  Interior. 

OPERATIONS. 

1.  No  operations  shall  be  permitted  upon  any  tract  of  land  until  a 
lease  covering  such  tract  shall  have  been  approved  by  the  Secretary 
of  the  Interior. 

POWERS   AND   DUTIES   OF   INSPECTOR. 

It  shall  be  the  duty  of  the  inspector — 

2.  To  visit  from  time  to  time  leased  lands  where  oil  and  gas  mining 
operations  are  being  conducted  and  to  inspect  and  supervise  such 
operations,  with  a  view  to  preventing  waste  of  oil  and  gas,  damage  to 
oil,  gas,  or  water  bearing  formations,  or  to  coal  measures  or  other 
mineral  bearing  deposits,  or  injury  to  property  or  life,  in  accordance 
with  the  provisions  of  these  regulations. 

3.  To  make  reports  to  the  superintendent  and  to  the  Bureau  of 
Mines  as  to  the  general  conditions  of  the  leases,  property,  and  the  man- 
ner in  which  operations  are  being  conducted  and  his  orders  complied 
with. 

13129°— 15  (2) 


4.  To  consult  and  advise  with  the  superintendent  as  to  the  condi- 
tion of  the  leased  lands  and  to  submit  information  and  recommenda- 
tions from  time  to  time  for  safeguarding  and  protecting  the  property^.—*  I 
of  the  lessor  and  securing  compliance  with  the  provisions  of  these  |/N% 
regulations. 

5.  To  give  such  orders  or  notices  as  may  be  necessary  to  secure  com- 
pliance with  the  regulations  and  to  issue  all  necessary  instructions  or 
orders  to  lessees  to.  stop  or  modify  such  methods  or  practices  as  he    '^  -. 
may  consider  contrary  to  the  provisions  of  such  regulations. 

6.  To  modify  or  prohibit  the  use  or  continuance  of  any  operation 
or  method  which,  in  his  opinion,  is  causing  or  is  likely  to  cause  any 
surface  or  underground  waste  of  oil  or  gas  or  injury  to  any  oil,  gas, 
water,  coal,  or  other  mineral  formation,  or  which  is  dangerous  to  life 
or  property  or  in  violation  of  the  provisions  of  these  regulations. 

7.  To  prescribe,  subject  to  the  approval  of  the  superintendent,  the 
manner  and  form  in  which  all  records  or  reports  called  for  by  these 
regulations  shall  be  made  by  the  lessee. 

8.  To  prohibit  the  drilling  of  any  well  into  any  producing  sand, 
when  in  his  opinion  and  with  the  approval  of  the  superintendent 
the  marketing  facilities  are  inadequate,  or  insufficient  provision  has 
been  made  for  controlling  the  flow  of  oil  or  gas  reasonably  to  be  ex- 
pected therefrom,  until  such  time  as  suitable  provision  can  be  made. 

9.  To  prescribe  or  approve  the  methods  of  drilling  wells  through 
coal  measures  or  other  mineral  deposits. 

10.  To  determine  when  and  under  what  conditions  a  producing 
well  may  be  drilled  deeper  and  under  what  conditions  a  producing 
well  or  sand  may  be  abandoned. 

11.  To  require  that  tests  shall  be  made  to  detect  waste  of  oil  or  gas 
or  the  presence  of  water  in  a  well,  and  to  prescribe  or  approve  the 
methods  of  conducting  such  tests. 

12.  To  require  that  any  condition  existing  subsequent  to  the  com- 
pletion of  a  well  which  is  causing,  or  is  likely  to  cause,  damage  to  an 
oil,  gas,  or  water-bearing  formation,  or  to  coal  measures,  or  other 
mineral  deposits,  or  which  is  dangerous  to  life  or  property,  be.  cor- 
rected as  he  may  prescribe  or  approve. 

13.  To  approve  the  type  or  size  of  separators  used  to  separate  the 
oil,  gas,  or  water  coming  from  a  well. 

14.  The  inspector  may  lirrtit  the  percentage  of  the  open  flow  capac- 
ity of  any  well  which  may  be  utilized  when  in  his  opinion  such  action 
is  necessary  to  properly  protect  the  gas-producing  formation. 

15.  The  inspector  shall  be  the  sole  judge  of  whether  his  orders  have 
been  fully  complied  with  and  carried  out. 

DUTIES   OF   LESSEES. 

16.  Before   actual   drilling  or  development   operations   are   com- 
menced on  the  leased  lands,  or  within  not  less  than  30  days  from  the 
date  of  approval  of  these  regulations  in  case  of  producing  leases,  or 
leased  lands  on  which  such  operations  have  been  commenced  prior 
to  such  approval,  the  lessee  or  assignee  shall  appoint  a  local  or  resi- 
dent representative  within  Osage  County  or  Oklahoma  on  whom 
the  superintendent  or  other  authorized  representative  of  the  Depart- 
ment of  the  Interjor  may  serve  notices  or  otherwise  communicate 


•with,  in  securing  compliance  with  these  regulations  and  shall  notify 
the  superintendent  of  the  name  and  post-office  address  of  the  repre- 
sentative so  appointed. 

In  the  event  of  the  incapacity  or  absence  from  the  county  of  such 
designated  local  or  resident  representative,  the  lessee  shall  appoint 
some  person  to  serve  in  his  stead  and  in  the  absence  of  such  repre- 
sentative, or  of  notice  of  the  appointment  of  a  substitute,  any  em- 
ployee of  the  lessee  upon  the  leased  premises  or  the  contractor  or 
other  person  in  charge  of  drilling  operations  thereon  shall  be  consid- 
ered the  representative  of  the  lessee  for  the  purpose  of  service  of 
orders  or  notices  as  herein  provided,  and  service  upon  any  such  em- 
ployee, contractor,  or  other  person  shall  be  deemed  service  from  the 
lessee. 

17.  Five  days  prior  to  the  commencement  of  drilling  operations 
lessee  shall  submit,  on  forms  to  be  furnished  by  the  superintendent, 
a  report  in  duplicate  showing  the  location  of  the  proposed  wells. 

18.  Lessee  shall  keep  upon  the  leased  premises  accurate  records  of 
the  drilling,  redrilling,  or  deepening  of  all  wells,  showing  formations 
drilled  through,  casing  used,  together  with  other  information  as  indi- 
cated on  prescribed  forms  to  be  furnished  by  the  superintendent  and 
shall  transmit  such  and  other  reports  of  operations  when  required 
by  the  superintendent. 

19.  Lessee  shall  furnish  'on  the  1st  day  of  January  and  the  1st  day 
of  July  of  each  year  a  plat  in  manner  and  form  as  prescribed  by 
the  superintendent,  showing  all  wells,  active  or  abandoned,  on  the 
leased  lands,  and  other  related  information.    Blank  plats  will  be  fur- 
nished upon  application. 

20.  Lessee  shall  clearly  and  permanently  mark  all  rigs  or  wells 
in  a  conspicuous  place,  with  the  name  of  the  lessee  and  the  number 
or  designation  of  the  well,  and  shall  take  all1  necessary  precautions 
for  the  preservation  of  these  markings. 

21.  Lessee  shall  not  drill  within  300  feet  of  boundary  line  of 
leased  lands  except  with  the  consent  of  the  superintendent.    Lessee 
shall  .not  locate  any  well  or  tank  within  200  feet  of  any  public  high- 
way or  any  building  used  as  a  dwelling,  granary,  barn,  or  established 
watering  place,  except  with  the  written,  permission  of  the  super- 
intendent. 

22.  Lessee  shall  notify  the  superintendent,  in  advance,  of  intention 
to  use  the  mud-fluid  process  of  drilling,  so  that  the  inspector  may 
approve  the  method  and  material  to  be  used,  in  the  event  the  operator 
is  not  familiar  with  this  process. 

23.  Lessee  shall  provide  a  properly  prepared  slush  pit  into  which 
all  sand  pumpings  and  other  materials  extracted  from  the  well  dur- 
ing the  process  of  drilling  shall  be  deposited.     Such  sand  pumpings 
and  materials  shall  not  be  allowed  to  run  over  the  surface  of  the 
land.    The  construction  of  such  pits  shall  be  subject  to  the  approval 
of  the  inspector. 

24.  Lessee  shall  effectually  shut  out  and  exclude  all  water  from  any 
oil  or  gas-bearing  stratum  and  take  all  proper  precaution  and  meas- 
ures to  prevent  the  contamination  or  pollution  of  any  fresh  water 
supply  encountered  in  any  well  drilled  for  oil  or  gas. 

25.  Lessee  shall  protect  to  the  satisfaction  of  the  inspector  each 
productive  oil  or  gas-bearing  formation  drilled  through  for  the  pur- 
pose of  producing  oil  or  gas  from  a  lower  formation. 


26.  Lessee  shall  place  an  approved  gate  valve,  or  other  approved 
controlling  device,  on  the  innermost  string  of  casing  seated  in  the 
well,  and  keep  same  in  place  and  in  proper  condition  for  use  until 
the  well  is  completed,  whenever  drilling  operations  are  commenced 
in  "wildcat"  territory,  or  in  a  gas  or  oil  field  where  high  pressures 
are  known  to  exist,  whenever  the  inspector  shall  deem  same  necessary 
for  the  proper  control  of  the  production  from  the  well. 

27.  When  natural  gas  is  encountered  in  commercial  quantities  in 
any  well,  lessee  shall  confine  such  gas  to  its  natural  stratum  -until 
such  time  as  the  same  can  be  produced  and  utilized  without  waste, 
it  being  understood  that  a  commercial  quantity  of  gas  produced  by 
a  well  is  any  unrestricted  flow  of  natural  gas  in  excess  of  2,000,000 
cubic  feet  per  24  hours:  Provided,  That  if  in  the  opinion  of  the 
superintendent  gas  of  a  lesser  quantity  shall  be  of  commercial  value, 
the  superintendent  shall  have  authority  to  require  the  conservation  of 
said  gas.     Water  shall  not  be  introduced  into  any  well  where  such 
introduction  will  operate  to  kill  or  restrict  the  open  flow  of  gas 
therein. 

28.  Lessee  shall  separate  the  oil  from  the  gas  when  both  are  pro- 
duced in  commercial  quantities  from  the  same  formation  or  under 
such  conditions  as  might  result  in  waste  of  oil  or  gas  in  commercial 
quantities. 

29.  Lessee  shall  not  use  natural  gas  from  a  distinct  or  separate 
stratum  for  the  purpose  of  flowing  or  lifting  the  oil. 

30.  Lessee  shall  prevent  oil  or  gas  or  both  from  escaping  from 
any  well  into  the  open  air,  and  not  permit  any  oil  or  gas  well  to  go 
wrild  or  to  burn  wastefully. 

31.  Lessee  shall  not  use  natural  gas  in  place  of  steam  to  operate 
engines  or  pumps  under  direct  pressure  except  with  the  special  per- 
mission of  the  inspector. 

32.  Lessee  shall  not  use  natural  gas  in  flambeau  lights,  save  as 
authorized  or  approved  by  the  inspector. 

33.  Lessee  shall  use  every  possible  precaution,  in  accordance  with 
the  most  approved  methods,  to  stop  and  prevent  waste  of  natural 
gas  and  oil,  or  both,  at  the  wells  and  from  connecting  lines,  and  to 
prevent  the  wasteful  utilization  of  such  gas  about  the  well. 

34.  Lessee  shall  notify  the  superintendent  a  reasonable  time  in  ad- 
vance of  starting  work,  of  intention  to  redrill,  deepen,  plug,  or 
abandon  a  well;  and  whenever  the  superintendent  or  inspector  has 
given  notice  that  extra  precautions  are  necessary  in  the  plugging  of 
wells  in  a  particular  territory,  lessee  shall  give  at  least  three  days' 
advance  notice  of  such  intended  plugging. 

35.  Lessee  shall  not  abandon  any  well  for  the  purpose  of  drilling 
deeper  for  oil  or  gas  unless  the  producing  stratum  is  properly  pro- 
tected, and  shall  not  abandon  any  well  producing  oil  or  gas  except 
with  the  approval  of  the  superintendent  or  where  it  can  be  demon- 
strated that  the  further  operation  of  such  well  is  commercially  un- 
profitable. 

36.  Lessee  shall  plug  and  fill  all  dry  or  abandoned  wells  on  the 
leased  lands  in  the  manner  required,  and  where  any  such  well  pene- 
trates an  oil  or  gas  bearing  formation  it  shall  be  thoroughly  cleaned 
to  the  bottom  of  the  hole  before  being  plugged  or  filled,  and  shall 
then  be  filled  with  mud-laden  fluid  of  a  consistency  approved  by  the 


inspector,  from  the  bottom  to  the  top  thereof,  before  any  casing  is 
removed  from  the  well,  or  in  lieu  of  the  use  of  such  mud  fluid,  each 
oil  and  gas  bearing  formation  shall  be  adequately  protected  by 
cement,  or  approved  plugs,  or  by  both  such  plugs  and  cement,  and 
the  well  filled  in  above  and  below  such  cement  or  plugs  with  ma- 
terial approved  by  the  inspector. 

Where  both  fresh  water  and  salt  water  are  encountered  in  any 
dry  or  abandoned  well  which  is  not  being  filled  with  mud-laden  fluid 
as  hereinbefore  provided,  the  fresh  water  shall  be  sufficiently  pro- 
tected against  contamination  by  cement  or  approved  plugs,  or  by 
both  such  cement  and  plugs,  to  be  placed  at  such  points  in  the  well 
as  the  inspector  shall  approve  for  the  protection  of  the  fresh  water. 

37.  If  such  abandoned  or  dry  well  be  in  a  coal  bed  or  other  mineral 
vein  deposit,  or  be  in  such  condition  as  to  warrant  taking  extra- 
ordinary precautions,  the  inspector  may  require  such  variations  in 
the  above-prescribed  methods  of  plugging  and  filling  as  may   be 
necessary  in  his  judgment  to  protect  such  seam  or  deposit  against 
infiltration  of  gas  or  water,  and  to  protect  all  other  strata  encoun- 
tered in  the  well. 

38.  The  manner  in  which  such  mud-laden  fluid,  cement,  or  plugs 
shall  be  introduced  into  any  well  being  plugged,  and  the  type  of 
plugs  so  used,  shall  be  subject  to  the  approval  of  the  inspector. 

In  the  event  the  lessee  or  operator  shall  fail  to  plug  properly  any 
dry  or  abandoned  well  in  accordance  with  these  regulations,  the 
superintendent  may,  after  five  days'  notice  to  the  parties  in  interest, 
plug  such  well  at  the  expense  of  the  lessee  or  his  surety. 

39.  All  B-S  or  water  from  tanks  or  wells  shall  be  drained  off  into 
proper  receptacles  located  at  a  safe  distance  from  tanks,  wells,  or 
buildings,  to  the  end  that  same  may  be  disposed  of  by  being  burned 
or  transported  from  the  premises. 

Where  it  is  impossible  to  burn  the  B-S,  or  where  it  is  necessary  to 
pump  salt  water  in  such  quantities  as  would  damage  the  surface  of 
the  leased  land,  or  adjoining  property,  or  pollute  any  fresh  water, 
the  lessee  shall  notify  the  superintendent,  who  shall  give  instructions 
in  each  instance  as  to  the  disposition  of  such  B-S  or  salt  water. 

40.  Lessee  shall  make  a  full  and  complete  report  to  the  superin- 
tendent of  all  accidents  or  fires  occurring  on  the  leased  premises. 

41.  Lessee  shall  provide  approved  tankage  of  suitable  shape  for 
accurate  measurement,  into  which  all  production  of  crude  oil  shall 
be  run  from  the  wells,  and  shall  furnish  the  superintendent  copies  of 
accurate  tank  tables  and  all  run  tickets,  as  and  when  requested. 

42.  The  superintendent  may  make   arrangements  with  the  pur- 
chasers of  oil  for  the  payment  of  the  royalty,  but  such  arrangements, 
if  made,  shall  not  relieve  the  lessee  from  responsibility  for  the  pay- 
ment of  the  royalty  should  such  purchaser  fail,  neglect,  or  refuse  to 
pay  the  royalty  when  it  becomes  due :  Provided,  That  no  oil  shall  be 
run  to  any  purchaser  or  delivered  to  the  pipe  line  or  other  carrier 
for  shipment  or  otherwise  conveyed  or  removed  from  the  leased 
premises  until  a  division  order  is  executed,  filed,  and  approved  by 
the  superintendent,  showing  that  the  lessee  has  a  regularly  approved 
lease  in  effect  and  the  conditions  under  which  the  oil  may  be  run. 
Lessees  shall  be  required  to  pay  for  all  oil  or  gas  used  off  the  leased 
premises  for  operating  purposes;  affidavits  shall  be  made  as  to  the 


production  used  for  such  purposes  and  royalty  paid  in  the  usual 
manner.  The  lessee  or  his  representatives  shall  be  present  when  oil 
is  taken  from  the  leased  premises  under  any  division  order,  and  will 
be  responsible  for  the  correct  measurement  thereof  and  shall  report 

all  oil  so  run. 

The  lessee  shall  also  authorize  the  pipe-line  company  or  the  pur- 
chaser of  oil  to  furnish  the  superintendent  with  a  monthly  state- 
ment, not  later  than  the  10th  day  of  the  following  calendar  month, 
of  the  gross  barrels  run  as  common  carrier  shipment  or  purchased 
from  his  lease  or  leases. 

43.  Lessee  will  not  be  permitted  to  use  any  timber  from  any  Usage 
lands  except  under  written  agreement  with  the  owner,  and  in  all 
cases  where  lands  are  restricted  such  agreement  shall  be  subject  to 
the  approval  of  the  superintendent  or  inspector.    Lessee  shall,  when 
requested  by  the  superintendent,  furnish  a  statement  under 'oath  as 
to  whether  the  rig  timbers  were  purchased  on  the  leased  tract,  and  if 
so,  state  the  name  of  the  person  from  whom  purchased  and  give  such 
other  information  regarding  the  procurement  of  timber  as  the  super- 
intendent may  desire. 

44.  Unless  expressly  provided  for  in  the  lease,  lessees  shall  pay  t 
the  superintendent  for  the  parties  in  interest  all  reasonable  damage 
done  to  the  surface  and  any  growing  crops  thereon  or  to  improve- 
ments on  said  land  in  the  amount  of  such  damage  when  agreed  upon 
between  the  parties  in  interest.    When  such  amount  can  not  be  agreed 
upon,  any  of  such  parties  may  notify  the  superintendent,  whereupon 
the  superintendent  shall  notify  the  parties  in  interest  that  it  such 
claims  can  not  be  arbitrated  satisfactorily,  he  will,  after     )  days 
from  date  of  notice,  investigate  the  matter  of  damage,  such  notice 
to  be  sent  the  lessee,  allottee,  or  his  heirs,  and  such  other  person  as 
may  have  informed  the  superintendent  in  writing  of  a  claim  to  an 
interest  in  such  lands.     The  superintendent  shall  thereupon  deter- 
mine the  damage  and  apportionment  thereof  between  the  parties  m 
interest    such  determination  to  be  final  unless  an  appeal  thereirom 
be  taken  to  the  Secretary  of  the  Interior  within  10  days  from  the 
date  of  notice  of  such  determination.    The  decision  of  the  Secretary 
of  the  Interior  shall  be  final  and  conclusive  upon  all  parties  con- 
cerned     The  lessee  shall  be  permitted  to  proceed  with  operations 
pending  determination  of  the  amount  of  damage  by  the  superin- 
tendent upon  depositing  with  the  superintendent  such  amount  as  he 
may  stipulate  as  sufficient  to  cover  the  damages  claimed,  and  such 
lessee  may  continue  with  operations  pending  appeal  upon  Depositing 
such  additional  amount,  if  any  as  may  be  sufficient  to  cover  the :  dam- 
i^es  as  fixed  and  apportioned  by  the  superintendent,  the  surplus,  it 
any   to  be  returned  to  the  lessee.    Pending  action  upon  toe.  appeal 
so  much  of  said  amount  as  is  not  in  dispute  by  the  parties  m  interest 

m  1  bFantUertSodcomply  with  any  provision  of  these  regulations  shall 
subject  the  lease  to  cancellation  by  the  Secretary  of  the  Interior  or 
the  lessee  to  a  fine  of  not  more  than  $500  per  day  for  each  and  every 
dnv  the  terms  of  the  lease  or  of  the  regulations  are  violated,  or  the 
orders  of the  superintendent  pertaining  thereto  are  not  complied 
wHh  or  to  both  such  fine  and  cancellation,  in  the  discretion  of  the 
Secretary  of  the  Interior:  Provided,  That  the  lessee  shall  be  entitled 


8 

to  notice  and  hearing  with  respect  to  the  terms  of  the  lease  or  of  the 
regulations  violated,  which  hearing  shall  be  held  by  the  superin- 
tendent, whose  finding  shall  be  conclusive  unless  an  appeal  be  taken 
to  the  Secretary  of  the  Interior  within  30  days  after  notice  of  the 
superintendent's  decision,  and  the  decision  of  the  Secretary  of  the 
Interior  upon  appeal  shall  be  conclusive. 

46.  These  regulations  shall  become  effective  and  in  full  force  from 
and  after  the  date  of  approval  and  stall  be  subject  to  change  or 
alteration  at  any  time  by  the  Secretary  of  the  Interior. 

E.  B.  MERITT, 
Assistant  Commissioner  of  Indian  Affairs. 

VAN.  H.  MANNING, 
Director  Bureau  of  Mines. 

Approved : 

Department  of  the  Interior, 
FRANKLIN  K.  LANE. 


GENERAL  LIBRARY  -  U.C.  BERKELEY 


